Copper doldrums force Crew to drop Red Dog project

The poor price of copper has prompted Crew Natural Resources (VSE) to drop its interest in the Red Dog copper-gold project on northern Vancouver Island.

The decison was also influenced by BHP Minerals’ announcement that it plans to close the Island Copper operation in September, 1995. Crew had hoped to supply crushed ore to the Island Copper mill.

Red Dog contains about 30 million tons grading 0.32% copper and 0.013 oz. gold per ton.

The outlook for North Vancouver Island is not, however, entirely bleak. Jordex Resources (VSE), for example, has made a final US$260,000 earn-in payment to BHP and now holds a 45% interest in the Expo property. The company hopes to develop a large open pit at the Hushamu deposit and convey crushed ore to the Island Copper mill, a distance of about 17 miles. Hushamu is estimated to contain about 191 million tons grading 0.27% copper, 0.009% molybdenum and 0.010 oz. gold at a stripping ratio of about 2.2-to-1. According to a 1993 study of Expo’s potential, a 55,000 ton-per-day mine would produce about 88 million lb. copper, 125,000 oz. gold and 2.2 million lb. molybdenum per year. The cash operating cost would be about $5.26 per ton, with a net smelter return of about $7.21 per ton. The estimates are based on a 0.79 exchange rate, a copper price of US$1.05 per lb., a gold price of US$350 per oz. and a molybdenum price of US$2.20 per lb. The capital cost is estimated at $170-$200 million.